Tax Counsel's Guide to Partnership Disguised Sales Rules: Structuring Transactions to Avoid Taxable Events
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
Intermediate
- work Practice Area
Tax Law
- event Date
Tuesday, August 26, 2025
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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This CLE/CPE webinar will provide tax counsel and advisers with a thorough, practical guide to the disguised sale rules for partnerships under current tax law and in light of pending tax reform. The panel will discuss the facts and circumstances tests under Treasury regulations, review potential changes to the disguised sale rules in pending tax reform, and offer useful guidance in drafting transfer documents to withstand IRS scrutiny.
Ms. Whitlock has more than 20 years of public accounting experience. Her industry focus includes energy, real estate, and private equity. She works closely with the firm’s tax teams on partnership issues. Prior to joining Schneider Downs, Ms. Whitlock worked in the national tax office of both Big Four and Mid-tier firms, advising clients on compliance, mergers, acquisitions, disguised sale analysis, allocations and calculations related to section 704(c) and 743(b), partnership agreement interpretation, and wrote multiple memorandums and opinions related to partnership transactions. She is a frequent speaker and author on technical tax topics.
Section 707(a)(2) provides rules for disguised sales and payments between a partner and a partnership, and rules for disguised sales of property between partners in a partnership and the tax treatment of such transactions. However, Treas. Reg. 1.707-3 provides a notable exception to the general rule that contribution of property in exchange for a partnership interest is a non-recognition event. Transactions falling under those listed in the regulation are treated as a sale of property by the partnership to the transferring partner, creating a taxable event requiring gain recognition.
Tax counsel must recognize that Section 707 and its regulations put the burden of proof on the partnership to defend a transaction against a disguised sale challenge and the impact of potential amendments under the One Big Beautiful Bill Act.
Listen as our panel discusses the facts and circumstances tests under current Treasury regulations and potential changes to the disguised sale rules in the 2025 tax reform, and offers useful guidance in drafting transfer documents to withstand IRS scrutiny
I. Current status of disguised sale regulations
II. Impact of 2025 tax reform under the One Big Beautiful Bill Act
III. Structuring considerations to avoid disguised sale reclassification
IV. IRS approach to property and key areas of focus
V. Best practices for tax counsel to minimize adverse tax consequences
The panel will discuss these and other key issues:
- Impact of 2025 tax bill on partnership transactions
- The IRS approach to what constitutes "property" in partnership transactions
- Transactions that are most likely to trigger disguised sale and anti-abuse rules—and result in taxable events
